One of the world's most remarkable -- and unheralded -- energy transitions is taking place in the unlikeliest of places: United Arab Emirates, home of the world's seventh-largest crude oil and gas reserves.

In Abu Dhabi, the emirate responsible for 2.5 million barrels per day, or 93 percent of UAE's oil production, an ambitious program of transition to renewables has been under way since 2006. The Masdar enterprise, a wholly owned subsidiary of the Abu Dhabi Government-owned Mubadala Development Company, has been working to develop and deploy renewable energy production, energy efficiency, and best-of-breed building technologies in search of truly sustainable modes of living in its sun-baked, dusty desert climate, where the mercury soars over 120° F in the summertime and drops to only 95° at night in sticky 85 percent humidity.

The heart of the proving ground for these technologies is Masdar City, a six-square-kilometer site with two square kilometers of built area. Its six buildings currently house residential apartments, a library, offices, and the nascent Masdar Institute, where 337 students from 140 countries are exploring the science of sustainability, from low-energy building design to nanotechnology research into the best materials for solar cells. It's entirely powered by a 10 megawatt (MW) grid-connected solar farm and one megawatt of rooftop PV modules, and features a number of technologies that make it 65 percent more energy efficient than typical Abu Dhabi buildings.

In addition, Masdar will flip the switch this quarter on a 100 MW concentrating solar power (CSP) plant dubbed Shams 1 ("sun" in Arabic), situated 164 km from Masdar City. The enterprise has also invested in the 19.9 MW Gemasolar plant -- the world's first CSP plant to use molten salt heat storage and run 24x7 -- and the 100 MW Valle CSP solar plant, both in Spain; as well as the 1,000 MW London Array offshore wind farm off the coast of the United Kindom, the largest offshore wind array in the world.

By invitation of Masdar, I visited Masdar City and Shams 1 last week and attended the World Future Energy Summit, also hosted in Abu Dhabi. (Disclosure: Masdar paid my travel, lodging and meals, but did not require or suggest any sort of quid pro quo; writing about this is strictly at my personal discretion, and I do so because I am truly impressed with what I saw.)

A strategic choice

It may seem strange that the world's seventh-largest oil producer, pumping over 3 million barrels per day of liquid fuels and over 5 billion cubic feet per day of gas, would see the attraction of investing in renewables, but that's only where the ironies begin in this part of the world.

A building next to the conference center (Photo by Chris Nelder)

Abu Dhabi, like the emirate next door, Dubai, boasts clusters of gleaming new glass-clad skyscrapers designed by adventurous architects, all constructed over the past 10 years. All the vehicles on the road are powerful SUVs and luxury sports cars made by high-end manufacturers like Mercedes, BMW, Bentley, and Ferrari, and they're all new. Even the pavement is new. The hotels are modern and designed to make Westerners feel right at home, with pop music from America on the P.A. and a KFC or Burger King never far away. It hardly seems like the place from which to launch a transformation of the Middle East's energy strategy.

And yet that's precisely what it is.

I sat down with Bader Al Lamki, the Director of Clean Energy at Masdar, and asked him why investing in renewable energy was a priority for Abu Dhabi, especially when the U.S. oil and gas industry has been pushing the entirely opposite message about achieving energy independence via oil and gas production, and turning our backs on renewables entirely.

His answers were as insightful as they were surprising.

"It's totally energy related," Lamki explained. "The trigger for the leadership here to think about switching to renewables is one that is also driven by the legacy of this country being an energy player on the world stage. For five decades we've been producing hydrocarbon resources. Yes, we still have substantial reserves with us, but inevitably they're going to diminish, one Sunday morning. The thinking here is perhaps of multiple forms. To start with: knowing that hydrocarbons are going to diminish with time. But the leadership thinks about the legacy it has established as a world-class energy supplier. It wants to position itself now, starting to invest in human capacity, building experience, and building that portfolio and credibility of being an energy supplier, this time with a different form of energy, knowing that renewables are the form of energy that will grow with time. So it's about sustaining and expanding the energy legacy of this country. That's number one."

"Number two, this country has been always careful and sensitive toward the environment, even while producing hydrocarbon resources. . . A zero flaring policy has been instituted for several decades -- way before [most] people thought about it. The environmental impact assessments were consulted before any new oil field development. And energy efficiency into the operation was also instituted. So again, this is about expanding the legacy of being environmentally sensitive, concern about sustainability, and also being responsible in balancing out the entire portfolio of energy that this country has been blessed with."

"Three, it's also a commercial opportunity -- it's a good business. We have to approach this industry with a commercial mindset. This is the only way that we're going to make renewable energy more sustainable by itself, is if you approach it from the outset as a commercial opportunity. And then in thinking commercially: the creation of a new sector, the creation of new sets of jobs, new sets of education lines for its people. So it's a holistic program that has several dimensions. But of course, again -- back to the environment, to stretch that a bit -- is the climate change issue. Embedded in the environmental discussion is climate change. There is clear recognition here that it is not a mirage. Politicians may debate it somewhere else, but in this part of the world, in this country in particular, they believe climate change is happening and we need to contribute and be responsible and to act."

Lamki went on to explain how Abu Dhabi has been a strong advocate in addressing climate change from the Copenhagen conference to Doha; creating and hosting the new International Renewable Energy Agency; and investing in Masdar's various projects.

"It's a holistic approach. There are business drivers; there are legacy drivers; there is environmental stewardship which is also a legacy that the leadership wants to maintain."

But why them? And why now?

Simply, because the country's leadership recognizes that its oil and gas won't last forever, and has the foresight to plan accordingly and diversify its economy. It also has an authoritarian government which permits it to chart a long-term course and stick with it.

"It's also a strategic choice," Lamki continues. "The term that I want to bring to this dialogue is 'energy mix.' In order to maximize value to a given nation, you need to look at your choices and see how best you can capitalize on the resources that you have been blessed with. And having this balance, this mix of resources to produce electricity, allows also the longevity and sustainability of the hydrocarbon resources. So we are able to create offset and produce electricity through alternatives, such as nuclear and renewables, and free up gas for other industrial applications. And overall this brings greater value to the country."

Great expectations

Diversifying its economy away from fossil fuels is the legacy of the late Sheikh Zayed Bin Sultan Al Nahyan, the principal driving force behind the unification of seven states into the United Arab Emirates in 1971, the emir of Abu Dhabi emirate, and the first president of the UAE. Under his leadership, the UAE emerged from poverty and sand to become a leading oil and gas producer with world-class destination cities and a keen interest in sustainability.

"We must not rely on oil alone as the main source of our national income," he proclaimed. "We have to diversify the sources of our revenue and construct economic projects that will ensure a free, stable and dignified life for the people."

Admittedly, Abu Dhabi is getting a late start on energy transition, and the renewable energy capacity it has built so far is modest. The 200 MW of domestic capacity it has either built or has in the project pipeline would generate less than 1 percent of its electrical consumption, by my rough calculations. But it has begun, and despite the harsh environment, and despite the project delays and rumored cost overruns, it is moving ahead. The nation has set a target to supply 7 percent of its power generation capacity, which is currently 23,000 MW, from renewables by 2020. That would make 1500 to 1800 MW of renewable capacity, says al Lamki, implying a 7- to 8-fold increase in just eight years, which would be a stunning achievement indeed. It also intends to implement a series of energy efficiency measures designed to reduce its overall energy consumption by 30 percent by 2030.

I sat down with Maria van der Hoeven, the Executive Director of the International Energy Agency, and asked her if Abu Dhabi's target was in line with what her agency hoped to see under the 450 Scenario in its latest World Energy Outlook report.

"You want the frank answer?" she asked. "The answer is no. But on the other hand, it's a very clear target, set in a country that hasn't done this before. So I would like also to be positive and give them the credit, and they are not the only ones [who need] to do their job. The other ones have to do their jobs as well. It's the first time that they really have a target and a year, so I think this is a big step forward. It's a shift of mindset, and that I think is remarkable."

van der Hoeven agrees that the country's strategy is smart. "One of the things we always tell countries is, if you really want to have a sustainable economy, you have got to diversify," she explains. "If you don't diversify, you will be in trouble. Not now, not in 10, 20, 30, 40 years, but one day you will. Because you can use your fossils only once, and then they're gone. . . I think this is exactly the reason why the K.A.CARE plan [a $109 billion investment in domestic solar capacity announced last year] is being inaugurated in Saudi Arabia, because they're fully aware of this and they want to stay in the oil and gas business and at the same time they know it will end and so they have to look for something else."

This diversification is not just good for oil producers like Abu Dhabi and Saudi Arabia; it's also good for the world. Nearly all of Abu Dhabi's power is generated from natural gas, so its increasing renewable generation capacity will reduce its gas consumption, freeing it up for export to the gas-hungry European continent. Saudi Arabia hopes its K.A. CARE plan will free up over half a million barrels per day of its domestic oil consumption, which will be good news for oil importers like the U.S.

Bader al Lamki agrees: "The outlook for the future is certainly one that requires action. I'm sure the crystal ball would tell us that there is an increasing demand on energy for domestic consumption, not only because of economic growth and population growth, but also the coupling with water demand which we can only achieve through desalination. There is an increasing need for energy to be able to satisfy the intended growth for the country. And for that I'm sure there is sufficient calculation to see what's the appropriate mix, to see what is the longest utilization of the hydrocarbon resources, doing it in a sustainable way, doing it in a way that will maximize value, doing it in a way that also will maximize energy security and water."

(The water-energy nexus, a subject I covered last August, was a key topic at the conference, which was held alongside the International Water Summit as part of Abu Dhabi Sustainability week. I will delve into the water aspect in a future column.)

From twilight to dawn

Matthew Simmons' seminal 2006 book on peak oil, Twilight in the Desert, warned of "the coming Saudi oil shock and the world economy." And his fearful vision of declining oil supply will eventually come to pass, although perhaps a bit later than he anticipated.

What Simmons didn't anticipate was two of the world's top oil producers deliberately switching their economies away from oil and gas, heralding the dawn of their renewable age. It's a hopeful development, albeit one that seems lost on U.S. ears.

While I was at the conference, Hearst journalist Jennifer Dlouhy tweeted that the American Petroleum Institute's CEO, Jack Gerard, "recently returned from Middle East, where 'they're talking about us,' given the surge in U.S. oil & natgas production." He must have been somewhere else, because where I was in the Middle East, they weren't talking about the surge in U.S. oil and gas at all, but rather how they might reduce their use of their own.

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